Mumbai court extends cop custody of two auditors accused in NSEL scam

A special court on Monday extended the police custody of Shrawan Jalan and Amit Kabra, the two auditors arrested in the ₹5,574-crore National Spot Exchange Limited

A special court on Monday extended the police custody of Shrawan Jalan and Amit Kabra, the two auditors arrested in the ₹5,574-crore National Spot Exchange Limited (NSEL) scam, till October 9.

Both Jalan and Kabra were arrested on Friday. They were produced before the court, after the period of their police custody ended on Monday.

Special public prosecutor Sunil Gonsalves, while seeking the extension of their custody for two more days, argued that the two auditors knew about the fraud since the time it took place in 2009 and were a part of it.

It was pointed out before the court that during their two-day custodial interrogation by the state-appointed auditors, Jalan and Kabra had admitted several details.

“It was revealed that the accused failed to question the company about the funds being diverted from the settlement security fund to mutual fund accounts. As auditors, they ought to have raised questions,” Gonsalves argued. He submitted that the police need to probe if the two auditors received kickbacks to turn a blind eye to the transactions.

The plea was objected by the counsel for the auditors Amit Desai. He argued that Jalan and Kabra were called by the police on more than 50 occasions and around 78 box files containing audit reports and other documents were also handed over to the investigators for probe. It was further submitted that it was not for the auditors to red-flag the transactions but to only audit and see if the accounts are maintained.

After hearing both the sides, special judge DE Kothalikar observed that the police should be given time for the accused’s custodial interrogation to ensure a proper probe.